You’ve signed Grover Norquist’s pledge to veto any tax increase as president. You’ve also pledged to get America on the road to a balanced budget. Since you’ve promised not to cut defense or Social Security, where specifically is the money going to come from?

Well, mathematically there are three ways of balancing a budget. One is by cutting spending; one is by growing the economy; and the last is by raising taxes.

The challenge of raising taxes is that it depresses growth. And so like a dog chasing its tail, you can’t get to a balanced budget by simply raising taxes. As a matter of fact, it is ultimately counterproductive. So my plan is based upon reducing spending and putting in place a program of policies that put more people to work and raise wages. So specifically, places that I would reduce spending: First, I will eliminate programs that are not absolutely essential. Obamacare is one of the easiest to eliminate from my standpoint and that saves approximately $100 billion a year. There are also programs I would return to the states where their growth can be managed and where they will be carried out with less fraud, inefficiency, and abuse. So for example, Medicaid, housing vouchers, food stamps, and other programs of that nature, I believe, can best be administered by the states. And finally I will cut the number of federal employees through attrition by at least 10 percent, and I will link their compensation with that which exists in the private sector. The plan that my team and I put in place achieves a balanced budget within eight years and does so without raising taxes.

One thing that distinguishes this recovery is that public sector jobs, government jobs, have already fallen by 650,000. Given the conservative goal of shrinking government, is this a positive development or a negative one?

Well, clearly you don’t like to hear [about] anyone losing a job. At the same time, government is the least productive—the federal government is the least productive of our economic sectors. The most productive is the private sector. The next most productive is the not-for-profit sector, then comes state and local governments, and finally the federal government. And so moving responsibilities from the federal government to the states or to the private sector will increase productivity. And higher productivity means higher wages for the American worker. All right? America is the highest productivity nation of major nations in the world, and that results in our having, for instance, an average compensation about 30 percent higher than the average compensation in Europe. A government that becomes more productive, that does more with less, is good for the earnings of the American worker, and ultimately it will mean that our taxes don’t have to go up, that small businesses will find it easier to start and grow, and we will be able to add more private sector jobs. Don’t forget! It’s the private sector jobs that pay for government workers. So if you have fewer government workers doing work more and more productively, that means private sector work will grow.